Oireachtas Joint and Select Committees
Tuesday, 15 December 2020
Joint Oireachtas Committee on Housing, Planning and Local Government
Housing Assistance Payment: Discussion
We are joined this morning by Marcella Stakem, research and policy officer with the Society of St. Vincent de Paul, and John-Mark McCafferty, CEO of Threshold. We are also joined remotely by Ann-Marie O'Reilly, who is a policy officer with Threshold. The opening statement, briefing material and the joint report compiled by the Society of St. Vincent de Paul and Threshold on the housing assistance payment, HAP, have been circulated to members. I will first ask the witnesses to make their opening statements following which members will be invited to address their questions. Generally, we take five minutes for questions and answers, which allows us to have a second round of questions.
Witnesses attending in the committee room are protected by absolute privilege in respect of the presentations they make to the committee. This means that they have an absolute defence against any defamation action for anything they say at the meeting. However, they are expected not to abuse this privilege and it is my duty as Chair to ensure this privilege is not abused. Therefore, if witnesses' statements are potentially defamatory in relation to an identifiable person or entity, they will be directed to discontinue their remarks. It is imperative that they comply with any such direction.
For witnesses who are attending remotely, there are some limitations to parliamentary privilege and, as such, they may not benefit from the same level of immunity from legal proceedings as a person who is physically present. They are directed that only evidence connected with the subject matter of these proceedings is to be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons, or entity by name or in such a way as to make him, her or it identifiable. Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against persons outside the House or an official either by name or in such a way as to make him or her identifiable.
The opening statements submitted to the committee will be published on the committee website following the meeting. I invite whoever would like to begin to make his or her opening statement.
Mr. John-Mark McCafferty:
I thank the Chairman and the members of the committee for the opportunity to present to them today on the matter of the housing assistance payment. Threshold has worked with and supported tenants living in the private rented sector since 1978. Threshold advocates for increased security of tenure, affordability, improvement in standards and a sustainable private rented sector. We are working toward a vision whereby private rental is on an equal status of tenure to other tenure options in Ireland, and we believe housing is a right.
The housing assistance payment, or HAP, is a form of social housing support available since 2014 to eligible persons living in the private rented sector. I want to note that HAP is a massive improvement from a policy and a practice point of view compared to rent supplement, not least because tenants can increase earnings and still be eligible for the housing assistance payment. Through Threshold’s work with tenants, we identified that many were struggling to pay rent even with the support of the housing assistance payment. To meet the rent they were paying top-ups to their landlord. This is rent paid directly by the tenant to the landlord in addition to the rent the landlord receives from the housing assistance payment. Many others were struggling to find a landlord to accept HAP. In 2019, Threshold carried out research into this issue and surveyed 116 tenants in receipt of or eligible for HAP. Our colleagues in the Society of St. Vincent de Paul were observing similar trends among the households they work with. We came together to publish the report and recommendations, with which the committee has been provided.
I will give the committee an idea of the scale of the housing assistance payment and then set out our findings from our research. Marcella Stakem will then set out our joint recommendations.
There are approximately 59,000 households currently supported by HAP. The Department plans to support an additional 15,000 households with HAP in 2021. Almost €560 million has been allocated for HAP in budget 2021. The 2019 expenditure was €382 million so it is an ever-increasing bill.
In terms of HAP limits, the maximum monthly rent limits payable for a household under HAP are set out in statutory instrument. These limits have remained largely unchanged since July 2016. As such, they fall far short of market rent in many instances. The national average rent increased 27% between Quarter 2 2016 and Quarter 2 2020. The HAP caps did not. One of the greatest obstacles faced by tenants is finding a place within the cap. Where they cannot, the tenants pay the shortfall in the form of a top-up to the landlord.
There are enormous shortfalls in HAP caps for single people looking to rent a one-bed property. A single person looking to rent a one-bed apartment in Cork city, Dublin 15 and Limerick city could potentially pay a top-up of €760 to make up the shortfall. A single person living in County Limerick or County Carlow may have to pay up to €350 in the form of a top-up to the landlord to secure a home. It is a similar story for families with three children who are looking to rent a three-bed house. Again, a potential top-up of €400 or more for families in these areas may apply.
With regard to the 20% discretionary uplift, local authorities may approve a discretionary 20% uplift in the HAP payment to help meet the rent. However, this is not guaranteed and is not practised consistently across all local authorities. This is often one of the challenges that Threshold advisers assist tenants with. In Quarter 4 2019, 36% of households, excluding homeless HAP, were receiving some degree of uplift in their HAP payment.
Even with the full 20% uplift, the HAP payment can often be insufficient. In a 2019 report from the Irish Government Economic and Evaluation Service, IGEES, it is estimated that the payments, inclusive of discretionary uplifts, fall short for 28% of HAP tenancies, meaning these tenants are paying a top-up to the landlord. A number of recommendations are made in the IGEES report. It is not surprising, then, that almost half of the HAP recipients we interviewed were paying a top-up to the landlord. These top-ups ranged from €100 or less to more than €500, and the average top-up was €177. Tenants of varying incomes paid top-ups across the range.
With regard to affordability, it is generally accepted that we pay up to 30% of our income on housing costs. This is a rough rule of thumb to calculate affordability and anyone who has applied for a mortgage knows the bank will apply a similar affordability test. However, among the tenants we interviewed, 20% were paying more than 30% of their income on rent and 10% were paying more than 40%. What was common across the board was that the Threshold clients we interviewed were struggling with day-to-day expenses as a result of the top-up. This is because tenants will prioritise rent over everything else. Rent arrears can accrue quickly, resulting in a notice of termination, and so are avoided at all costs. Almost half of those who participated in the Threshold survey said they struggled to pay the electricity or heating bill, buy groceries or cover childcare and school costs. To have a home, heat and food are the basics we all require to live and to have a chance to achieve our potential. The tenants paying more than 30% of their income do not necessarily have these.
As a form of social housing, which it is regarded as by some, HAP lacks the security of tenure tenants of local authorities and approved housing bodies, AHBs, have. A HAP tenant can be evicted through no fault of their own. The most common query brought to Threshold is about notices of termination, representing a third of all queries each year. More than three quarters of these were issued where there was no wrongdoing on the tenants’ part. A landlord can issue a notice of termination if they wish to sell the home, need it for their own use or that of a family member, wish to renovate or on grounds of section 34(b), whereby a Part 4 tenancy is coming to an end.
A requirement of HAP is that the property meets the minimum standards for private rented dwellings and all HAP properties are meant to be inspected to ensure this. Unfortunately, some tenants reported the inspections had not happened after a year in the property and, on occasion, when the local authority directed the landlord to undertake repairs, this was never done and the local authority did not follow up. Worryingly, stories of mould, damp, broken heating systems and ill-health were commonplace. This is not surprising as queries about standards and repairs are among the most common issues dealt with by Threshold’s advisers.
The second greatest obstacle for HAP tenants was the difficulty in finding a landlord to accept HAP. Under HAP, tenants must source a property themselves. Despite the fact the Equal Status Act 2015 prohibits discrimination against those in receipt of HAP, tenants reported instances where landlords refused to accept HAP or sign the paperwork. In some cases, landlords never returned the paperwork, resulting in the tenants falling into arrears and they can be evicted for these arrears, notwithstanding the recent Covid-19-related legislation. Some groups in society are vulnerable to further discrimination by certain landlords such as members of the Traveller community, migrants and persons with disabilities. As such, these groups are even further excluded from access to housing. Tenants can take cases to the Workplace Relations Commission to challenge such discrimination, and Threshold supported 11 households in such cases last year. While the WRC generally finds in the tenants’ favour, this does not always guarantee access to housing.
With regard to HAP in practice, as with all systems, there are areas which work well and those where improvements can be made. The payment of rent in arrears from the day the HAP application is processed as opposed to the day the tenancy started is highly problematic. Landlords expect rent to be paid upfront and in advance. Tenants can fall into severe financial distress in an attempt to make these upfront payments. The treatment of arrears has presented issues for HAP tenants. Once arrears accrue, tenants are required to pay the arrears within eight weeks. If they are unable to do so, the HAP payment to the landlord is stopped and the tenancy deemed lost. This is in stark contrast to the treatment of arrears for other social housing tenants – mainstream social housing tenants, in other words - where a more client-centred, homeless prevention approach is taken.
The fact that tenants can still work and benefit from HAP is a hugely positive element. When their income increases, their rent contribution to the local authority increases, as with any social housing tenants. Those tenants who were afforded the 20% discretionary uplift in the HAP payment found it a lifesaver. Many of the tenants spoke highly of the staff in the HAP offices, finding them very helpful.
I thank members for their time. I will hand over to Ms Stakem of the Society of St. Vincent de Paul to talk through the recommendations.
Ms Marcella Stakem:
We welcome the opportunity to make a presentation to the committee on behalf of our respective organisations. The unprecedented housing crisis that is impacting the well-being of individuals, children and families, forcing people into a constant state of insecurity and driving poverty among those in the private rented sector, continues. Our research shows that HAP is providing an important short-term housing support and preventing more people experiencing homelessness. However, it contains a number of design flaws which need to be reformed if this support is to meet the needs of low-income households in the private rented sector.
As outlined by Mr. McCafferty, HAP limits are currently insufficient in meeting market rents, making it very difficult for low-income households to access private rented accommodation. It fails to provide sufficient security of tenure and cannot meet the needs of people who have a long-term housing need. In practical terms, this means they are households in a constant state of worry about where and how they are going to live. Society of St. Vincent de Paul members see this experience through their home visitation work, where they see families struggling to make ends meet, cutting back on essentials such as food so their rent is paid on time. It also fails to recognise the difficulties and discrimination facing some vulnerable households trying to access housing in the private rented sector, who must compete with other prospective tenants who may be seen as more desirable by landlords. This is evidenced by the fact that the second highest number of queries to the Irish Human Rights and Equality Commission regarding the Equal Status Act relates to the housing assistance ground. Both Threshold and the Society of St. Vincent de Paul work with tenants who find themselves in this situation all too regularly.
Ultimately, what is needed for the clients we support is a broader choice of housing, real affordable rental, real affordable purchase and an increase in local authority and AHB building and acquisition. These are vital ingredients to address the issue of housing supply and render the private sector more affordable.
We have outlined a number of other recommendations that we feel would make HAP a workable short-term housing solution until such time as there is sufficient social housing provision. Our research recommends that a complete review of HAP and its interaction with the private rented sector is required to determine the next steps for HAP, given the changed landscape of housing and renting in Ireland since its introduction in 2014. We recommend a strategy to introduce minimum energy efficiency standards in the private rented sector, which will ensure that all accommodation meets an energy rating of at least C1 or higher by 2030. This is urgently required as Society of St. Vincent de Paul members who visit people in their homes find that many tenants are living in substandard and possibly unsafe accommodation, and are unable to force their landlord to improve the standard of their living conditions in case they are asked to leave.
If a tenant who is engaging with a local authority falls into arrears on his or her differential rent or top-up, a realistic repayment plan should be worked out to clear the arrears over time with the local authority and the landlord. In the interim, the local authority should continue to make the housing assistance payment to the landlord to prevent the household entering homelessness.
We also recommend a protocol similar to the interim tenancy sustainment protocol for HAP to prevent homelessness. We have witnessed through our work an increase in the number of clients getting into difficulty with their rent in recent times. This is occurring as households cannot continue to pay unaffordable top-ups in addition to their rent contribution through HAP. The roll-out of an information and awareness raising campaign to educate landlords on HAP and the equality legislation is needed. An investigation into landlord and agent refusal to accept HAP should also be included in the review. As shown, some local authorities are not awarding the 20% uplift, despite recipients receiving it in previous tenancies. All local authorities should provide the 20% uplift where a household requires it to improve affordability and as a homelessness prevention measure. On a practical level, there are steps that could be taken to improve how HAP works in practice. The length of time to process applications, the payment of rent from the date the application is processed as opposed to the date the tenancy commenced, the payment of rent in arrears and the non-payment of a deposit must all be addressed to reflect the reality of the private rented sector.
Through our work we see the devastating impacts that insecure housing has on people's physical, financial, social and emotional well-being, all of whom now have the added pressure that Covid-19 has brought to people's lives. We are delighted to have had the opportunity to complete the report with Threshold, which also works with households that are dealing with significant stress and insecurity relating to their housing tenure. We thank the committee members for listening to us today and we look forward to working with them to progress the necessary policy and practical changes required to make HAP fully fit for purpose.
Thank you. Many of us have come quite recently from the local authority setting so we know at first hand the difficulties, worries and stress faced by people in trying to secure a tenancy, trying to find a property, encountering landlords who will not accept HAP and the difficulties that go with that. Sometimes a person can feel powerless in that situation and limited in what he or she can do. I welcome that you noted in the report how much hard work is done by the HAP officers in the local authorities and, from my experience in Wicklow, the lengths they go to as well as how much effort they put in for people who contact them. It is important to acknowledge that.
I will call the members for their questions. The first is Senator Fitzpatrick.
I thank the witnesses for the work they and their organisations do every day. I also thank them for attending the meeting today. My background is as a city councillor and I am from Dublin Central where the Society of St. Vincent de Paul is headquartered. Ms Stakem spoke about her work every day and the effect housing poverty has on people's lives. I share her concern and understand that as well. It is the most devastating and undermining thing that can happen to an individual or a family. I am happy to tell her that the new Government is committed to delivering on the strategic changes she referred to and the changes in respect of affordable rental, affordable purchase and investment in more public and social housing. For the purpose of today's meeting, I will talk about the HAP review because there will be an interim period for rolling out an affordable rental scheme and an affordable purchase scheme as well as the building of public housing.
With regard to the survey that was conducted, will the witnesses clarify when that was completed and how many people participated in it? Were they all Threshold clients or was there a wider base? Regarding the inspections of the properties, was the problem with that localised to a specific number of local authorities? If I can get those answers quickly, I will refer back to the witnesses.
Ms Ann-Marie O'Reilly:
Threshold surveyed 116 tenants in February and March 2019. These were entirely tenants who had contacted us prior to that seeking assistance from Threshold in respect of their tenancies. Regarding where there were issues with standards in the local authority inspections, it was not related to just one local authority. I would have to check the data to see which local authorities, but it was not limited to just one or two.
I thank Ms O'Reilly. If we look in 2020 at a survey from back in 2019, Covid has had a dramatic impact. Our homes and living space have become more important to all of us. There has been a big change in Dublin, in particular. A year ago people could not get landlords to take the HAP or they could only do so with great difficulty. With the arrival of the Covid pandemic, foreign students disappeared, students from the country went back home to study from home and people working in Dublin who came from the country and who were advised to work from home moved home. In the past three to six months I have seen a big increase in the availability of private rented accommodation on a HAP basis. Do the witnesses agree with that?
Second, in terms of the other issues the witnesses addressed, security of tenure is a very difficult issue to get around when it is private rented accommodation. How do the witnesses think that could be addressed without removing control of the property from the landlord? On the deposit and the first month's rent, I agree with the witnesses. That is a big issue for many people in securing the HAP tenancy. Homeless HAP provides that. In my experience in Dublin over the past 12 months, the homeless HAP payment has made it significantly easier for private rental tenants to secure accommodation, but they are almost being forced into becoming homeless to qualify for homeless HAP and to get the 20% uplift and the first month's rent and deposit. Do the witnesses agree with that?
Regarding discrimination, did I hear correctly that 11 cases were taken? If so, out of 60,000, is that accurately reflecting a very small problem? I agree that a full review must be undertaken and that is why I asked how many people had participated in the survey. While 116 is certainly informative, it is not a huge sample out of a potential tenancy base of 60,000 to 70,000. When suggesting a review of HAP, what sample size is suggested for it to be comprehensive? I agree that the review must be undertaken because we will have the HAP in the future and half a billion or more is being spent on it. We need to manage this quite effectively. I would appreciate answers to those questions.
Mr. John-Mark McCafferty:
Covid-19 has been an absolute game changer in all aspects of our lives, including housing. A couple of things are striking. In some ways we are surprised that there is less of an increase in availability than had been anticipated. In the short lettings, for example, there is some, but it is very modest. As there had been such a demand there that was unmet, with a relative softening in the market, there was a long way to go and a need for a great deal of capacity. We have seen moderation in rents. In the Cork city and county area, because we also have an access housing unit that sources and facilitates access to social rented housing and private rented housing, the situation is as challenging as it ever was.
In Dublin, there has definitely been a softening but not necessarily the kind of embarrassment of riches that one might assume with such a shock to a housing system.
I am sorry to interrupt but we need to keep questions and answers to five minutes. There were many questions asked and they took up most of the five minutes. I expect similar questions will be answered as we proceed. I apologise but I must move on to Deputy Ó Broin. The first question has been answered.
I thank the witnesses for their presentations and the work both of their organisations are doing.
It is important when talking about HAP not to talk about it alone because it is only one of four rental subsidies in the market. We have HAP, the rental accommodation scheme, RAS, the rent supplement and long-term leasing. For next year, the Government has provided €1.05 billion for the rent supplement. There are currently 100,000 tenancies subsidised by the State. That is one third of all tenancies in the rental market. Next year, both the amount of money and the total number of people subsidised will increase significantly. Part of the problem is that rental subsidy started out as a short-term stopgap with rent supplement. Government policy currently regards the rental accommodation scheme, HAP and long-term leasing as forms of social housing, not as temporary measures to meet the cost of private rental while waiting for adequate social housing. That, in itself, is a problem that needs to be reviewed.
I absolutely share both organisations' concern over the current operation of HAP. I want to highlight a couple of issues that are of particular concern to me. The first is that it now takes many local authorities about ten weeks to process HAP applications. Very few private sector landlords, particularly those who are semi-professional or who are accidental landlords with a mortgage payment to meet, can wait ten weeks before getting a payment. It is causing a real difficulty. Neither the Department nor the authorities in Limerick, which manage HAP, will give us a straight answer as to why that is the case. Is the delegates' experience reflective of that?
I fully agree that the change of practice involving HAP being backdated to the date of application rather than the date of tenancy commencement is really problematic. It is not unusual for three or four weeks to pass before documentation comes in, leaving the tenant in very vulnerable circumstances. Have the witnesses further thoughts on that?
I have two other concerns. Homeless HAP, which is a necessary support, is having a distorting impact in Dublin. We have to be honest about it. Standard HAP applicants are being priced out of the market because landlords know that homeless HAP is available. Local authorities are now providing homeless HAP four to six weeks in advance of a notice to quit being issued. I am not arguing against that. It is a necessary function but there is a distorting impact that we have to name and start thinking about.
Another group of people affected by this comprises those households whose income is just above the threshold for social housing supports and who are now competing with people on HAP and homeless HAP. Their income levels might not be very different. Have the delegates any thoughts on that?
I am firmly of the view that the HAP was badly designed. A review is needed urgently. Organisations such as those of the witnesses cannot carry out a huge survey of thousands of applicants as that is the responsibility of the Housing Agency and the Department. Most of us who deal with many HAP applicants will have had many experiences like the ones the witnesses have expressed here today.
My one concern is that if we raise the HAP limits, either by having a 50% discretionary limit across the State rather than the 50% limit for Dublin and 20% outside Dublin, or if we index link HAP to something else, there is an incentive for landlords to keep pushing the rents up. Dublin rents are flatlining, according to Daft and the Residential Tenancies Board, RTB, but rents in other urban centres are increasing. In Cork, Galway, Sligo and Waterford, the rate is between 3% and 5%. The more money put into rental subsidy, the more rent goes up. I am not arguing against the increase but I would always have been of the view that there needs to be a cap as well as an increase. Where an increase is provided, there should be a cap of some level on the entire rental market.
I have a question for both witnesses. Maybe this is the first one they could answer. It is all very well for us to have this discussion, express concern and sympathy and agree with the witnesses, but what do they want us to do? That is the important point. The witnesses are here in front of the committee. Is there specific action they would like us to take on foot of the evidence they have given us? I refer to taking an action from today rather than just discussing an issue that most of us have some experience of, although we appreciate the work the witnesses are doing and the research they have presented to us.
Ms Marcella Stakem:
We would really like to see a complete review of HAP. As the Deputy stated, the Society of St. Vincent de Paul and Threshold do not have the capacity to survey thousands of recipients of the payment. Therefore, we would really like to see a complete review. Aspects of the HAP have been reviewed but these reviews have been carried out in isolation over recent years. For HAP to work in practice and to work effectively for the coming years, we really need to consider it in its entirety and its connection to the private rental sector.
Mr. John-Mark McCafferty:
The takeaway this morning is that there needs to be a complete root-and-branch review of HAP. That is the main action point coming from here. I take the Deputy's point on the distortion in the market regarding Dublin and the homeless HAP. For us, the barrier is really around singles in emergency accommodation trying to gain access to housing. We are working to some extent on this. The limits are really quite restricted with regard to facilitating their access to the market.
The Deputy also mentioned the households just above the social housing thresholds. I hope that initiatives such as affordable rental will grow over time, starting from a very small baseline. We are mindful of the first project between Respond and Tuath on the Enniskerry Road. My sense is that a number of larger approved housing bodies will be moving to bring such projects to the market and to supply.
On both points, I would love for us to produce a much larger sample but I guess it is a question of capacity. These are the kinds of research elements that larger statutory agencies can provide. A sample size of 116 does give a good sense of the forces and factors at play in the 2019 market. That has been very helpful.
Representatives from both organisations are in agreement that a full review is needed and that the capacity of the two organisations to carry it out is limited. What is the one aspect of HAP that the witnesses would like to see changed as a result of a review?
Ms Ann-Marie O'Reilly:
We are limited in that we cannot dictate to landlords the equality legislation that exists. Therefore, we cannot force them to take HAP recipients but it is a matter of ensuring that, when somebody is approved for HAP, they have the paperwork and that the process is streamlined. Our survey was very clear on the point that, as soon as somebody received HAP, there was such relief. The recipients were so appreciative and delighted to have it. It meant they could get on with other aspects of their lives. While some had the top-up, and that posed a challenge, having HAP was a huge improvement. It is a matter of streamlining the process and paying the rent from the date on which the tenancy starts, not from the date it is processed. It should be paid upfront and the deposit should be paid also. That would make a huge difference.
On all the other aspects, including accessing properties, landlords accepting tenants and the costs, these are all tied into much bigger market forces. I hope some of the more structural elements being addressed now will assist in this regard, but HAP was created in 2014 for a very different market and it needs to adapt, change and operate within the private sector we have now. That would be very significant for the recipients of HAP.
I thank the witnesses for attending. It was useful and informative to read their reports in advance and to get their breakdown. My experience of families availing of HAP is in line with that of many of the witnesses' surveyed participants. The report states 75% of those surveyed were happy with HAP. It is great to read about the level of relief among participants on being able to afford the rent. This came across strongly. Ms O'Reilly has just alluded to this. It shows the real benefit of HAP in real people's lives.
My experience, having spent ten years as a county councillor on South Dublin County Council, is that landlords, and often estate agents, still discriminate against HAP tenants. It is a really serious problem. It is now being tackled through a legal instrument, but that has not seemed to create the cultural change we need. I would welcome the recommendations of the witnesses on further actions that could be taken to make it easier for HAP tenants to find rental accommodation as they start that process.
Senator Fitzpatrick referred to the impact of Covid. According to the most recent report published by daft.ie, there are now twice as many rental properties available in Dublin as there were at this time last year. I hope that has made it easier for people of all backgrounds and on various subsidies to be able to access rental accommodation. Do the witnesses have further figures relating to the impact of Covid on HAP tenancies? I would be interested to know more about the increase in HAP tenancies during Covid-19 and the impact reduction of income has had on those tenants. Obviously, extra supports have been made available to people who have lost income or had their income reduced as a result of Covid. Has that assistance provided by the State been effective?
Mr. McCafferty noted that when the income of HAP tenants increases, their rent contribution increases too. Does he find that that happens in practice? My understanding is that it is not an automated process and it relies on people self-declaring an increase in their income. Is that happening on the ground?
Ms Stakem spoke about the wider housing problems. I reiterate that all present are very much committed to resolving those wider issues. We get that this is a piece of that puzzle. Security of tenure, which she mentioned in terms of long-term leases, is critical not just for HAP tenants, but also for private tenancies and those availing of rent supplement.
I agree with many of the remarks of Ms O'Reilly around streamlining the process in terms of the application, as well as increasing it. I also agree with her on the issue of paying rent from the day a rental agreement comes into effect. She referred to a root-and-branch reform or review of the HAP system. I am not hesitant to do that, but if we have recommendations that we believe would reap benefits, that is something we could look to pursue now, rather than wait until another report is prepared. I believe that would be kicking the can down the road. I am anxious to see what we can do currently to improve the situation.
Mr. John-Mark McCafferty:
I will start off and then hand over to Ms Stakem. I thank the Deputy for her questions. She asked about discrimination. It goes back to a point made by Senator Fitzpatrick. We assist with representing tenants who face discrimination at the Workplace Relations Commission, WRC. The numbers are relatively low. However, our experience is that tenants generally cannot hang around. They need to be housed and if they are facing barriers, they will move to the next landlord to try to source accommodation. We asked ourselves whether this is an issue that is raising its head. Many of the tenants just need to move on. It is only in certain circumstances, such as tenants having sourced housing elsewhere, that they have, if one likes, the "luxury" of pursuing such a course.
We welcome the increase in units. The impact of Covid-19 on tenancies generally is the stuff of research really. We will be seeking to carry out further research in the coming year because what we are seeing and what the ESRI indicated earlier this year is that the sectors in which renters work are those that have been disproportionately affected in terms of lay-offs and redundancies. However, there has been a significant protective effect from the pandemic unemployment payment and access to rent supplement. I am struck by the low take-up of rent supplement this year, given the circumstances. I wonder why that is the case because a much more pragmatic approach was certainly taken in terms of the processing of applications and access to the supplement.
I wonder also about the issue of arrears. There is a natural assumption that arrears are building, yet there is a low number of arrears coming through the new legislative system that is dealing with arrears. There are several things to which we need to pay further attention.
I too would be interested to know what is triggering or not triggering those changes. The principle of HAP is that it incentivises work and it should be responsive to changes in income and rents because there is a big issue facing the wider social housing sector and the local authority sector where local authorities are kind of hobbled by rent levels.
Ms Marcella Stakem:
I will address the question in respect of the impact of Covid on HAP tenancies. Like Threshold, we plan to carry out research and analysis on this issue early in the new year. What we in the Society of St. Vincent de Paul have noticed is an increase in calls. Last year, we received 160,000 calls for assistance. We expect that figure to increase generally because of loss of income and loss of employment. The period coming up to Christmas is our busiest time of the year. What we notice is that people do not specifically contact us about rent arrears. They tend to seek help with food, a utility bill or an education cost, but when one of our members visits the person, they find there are rent arrears or there is difficulty paying rent and that the core problem the household is having. The initial call may be around food but the actual problem is around an unsustainable top-up the person is trying to pay.
Ms Ann-Marie O'Reilly:
On the issue of discrimination, although we only supported 11 households last year to take cases to the WRC, I have conducted a review of the number of tenants in the fourth quarter of 2019 who came to us to say they had difficulties accessing HAP because of a landlord's refusal. In approximately 90 of 350 cases reviewed, the tenant stated that had been an issue. However, as Mr. McCafferty stated, not every tenant will take a case in such circumstances. In some instances where we contacted the landlord or the agent and made them aware that they may not discriminate against a HAP tenant, the issue was resolved. Only 11 cases were taken to the WRC but that is just the tip of the iceberg. As Ms Stakem stated, it is the second most common complaint lodged to the WRC.
On the issue of a review of HAP, I understand the comments of Deputy Higgins. None of us wishes to wait for another few months for another review to be done. There is a significant amount of information available already. It would be worthwhile to speak to the other stakeholders. For example, one could speak to landlords to find out why they do not accept HAP. We need to find out what they are thinking and what their reasoning is. Many landlords will accept rent supplement but they will not accept HAP. We do not know why that is the case. There is a need to speak to the people working in local authority HAP offices. I have spoken to them, as have committee members who previously served as councillors. The staff of those offices encounter these issues and they see where the blocks and challenges are and why it takes so long to process payments. From what I understand, it is a very paper-intensive process. There are many things that probably could be freed up to make HAP work better. It certainly can be an effective support, but those who are a bit more vulnerable and really need the payment are sometimes badly let down.
I would like to return to the issue of security of tenures, as raised by Senator Fitzpatrick, as well as the low uptake of rent supports and rent supplement and why the witnesses think that might be the case. Those supports are available for people who may be forgoing things such as food and other necessities. We need to make that known.
I thank Mr. McCafferty, Ms Stakem and Ms O'Reilly for their presentations. More importantly, I thank the organisations they represent, namely, Threshold and the Society of St. Vincent de Paul. The committee and, indeed, the nation is indebted to them and their advocacy work. I wish to acknowledge their campaigning. It is very much based on delivery of a rights-based approach and it is always consistent.
I was a member of this committee for the previous four years. The witnesses have also spent a lot of time analysing the problems. I clearly hear the issues relating to the witnesses' capacity from Senator Fitzpatrick and Deputy Ó Broin and having a bigger, wider and more comprehensive review. That is what is clearly emerging. It is not that anyone is questioning or doubting but when one is making a case politically for these sort of reforms, it always needs to be evidence-based. I am of the view that HAP was temporary by nature.
I was very taken by the Society of St. Vincent de Paul's visitation programme. I know there is less of this with Covid. The society is meeting very vulnerable people. The very fact that they are in the HAP programme and are seeking support and that some, though not all, of them are unemployed - a high percentage of them are employed - all boils down to affordability in terms of a home for oneself. It is important that we acknowledge that and the witnesses' rights-based approach because it is really important.
The witnesses touched on section 34 of the Residential Tenancies Act where a landlord is permitted to evict a tenant for the purposes of sale, refurbishment, owner use or change of use and the difficulties around that. I was a councillor for many years. When I finished up, particularly when HAP was being talked about more in the past few years, the lack of secure tenure came up. This is one of the biggest problems with regard to why people do not want to be in HAP. Can Ms O'Reilly tell us why landlords are resisting HAP? There are reasons behind that. Is it to do with bureaucracy and red tape? Is it to do with issues around revenue? Is the issue the fact that they are tying up their properties for too long? Remember that an awful lot of people in this area are involved in investment accommodation. They were there to make a buck. Many of them have been stopped in their tracks. I would like Ms O'Reilly to tease that out so that we get an understanding of the typical landlord and why he or she resists HAP. I know that Threshold continues to advocate for the removal of no-fault evictions. Could the witnesses elaborate on that?
It goes back to the same old story. There is the urgent need for real affordable rental housing where rent reflects the ability to pay. That says it all in a nutshell. That is the kernel of the problem. Deputy Ó Broin spoke about what the witnesses' ask was. We are here and are policy makers. What is the witnesses' ask? It is really important for the witnesses to state their ask as concisely and clearly as possible. I cannot thank both organisations enough because I have worked with both of them on the ground and know the importance of their work. They are a real source of encouragement. We are lucky to have these organisations advocating for people who need affordable homes. I thank the witnesses for coming in.
Mr. John-Mark McCafferty:
Why are landlords resisting HAP? I do not have the full answer. A small number of them do not want their places inspected. That might be something that would be put them off. For a very small number, it could be the tax issue as well. For possibly a wider group, it is that interaction with officialdom when heretofore things were a bit looser. They might see an administrative burden. Those are what I imagine some of the reasons might be. They are not justifications in my mind but they are probably some of the reasons that might be cited. Far be it from me to speak on behalf of landlords.
Regarding no-fault evictions, I named a number of areas. Here is that delicate balance between the fact that it is a landlord's property and a tenant's home. The legislation being deliberated on by this House is very much around looking at that in the context of a prolonged Covid period. Clearly, it is that balance of rights, for example, if a family member needs to move into someone's house or a landlord is required to sell. I know things have been really tightened up in terms of renovation. If we go back three or four years ago, the renovation clause was used as a trigger for the end of a tenancy. That legislation has been tightened substantially so that a landlord now has to do a very substantial job that involves complying with energy efficiency regulations to end a tenancy on those grounds. No-fault evictions are dealt with in section 34(b) of the Act where at the end of a six-year period, the tenancy simply comes to an end. I guess the reason we are talking this morning about security of tenure is because public policy frames HAP as a de facto social housing support yet it does not provide the same security of tenure. We know that the private rental sector does not provide the same security of tenure generally. When HAP is claimed as a social housing support, it is quite different in its look and feel from a tenure security point of view compared to local authority or approved housing body housing.
Ms Ann-Marie O'Reilly:
I will address landlords' reluctance to accept HAP. I thank Senator Boyhan for his comments. He referred to landlords possibly not wanting to be tied up in a tenancy. There is a misunderstanding among landlords that they are expected to take on a HAP tenant for a minimum of two years. That is not the case. The tenant is expected to stay in a tenancy for a minimum of two years before looking for somewhere else or moving. This is possibly to reduce the administrative burden on the HAP office. If within six, eight, nine or 15 months, that landlord decides to end a tenancy because he or she is selling the property or his or her daughter is moving in, he or she can. There is no obligation on him or her so there is a misconception out there.
As Mr. McCafferty said, there are other reasons. I will check the figures I am providing to members of the committee. When we rang landlords and agents and made them aware that they were breaching the equality regulation, many of them then accepted HAP so clearly those obstacles are not that much of an obstacle. There is simply a reluctance or refusal or possibly a misunderstanding of what HAP is.
The work done by both organisations is heroic. I met the witnesses previously and they briefed me for which I thank them. We are looking at 100,000 people. I know the witnesses said the figure was 59,000 but there are others in that space. I know we discussed this previously. This is a legacy issue from Part V. While the intention of that device was to create communities where all types of people could live together, it failed during the recession. Developers instead of local authorities were tasked with providing housing. When they stopped building, no social housing was built. Typically, the local authorities would build during recessions because it was cheaper. This is has left us in the space in which we find ourselves. HAP and other measures are filling that gap. I think something close to €700 million was spent each year, which could build quite a few houses. I have said previously that the State should not be fuelling the private market, which is what it is doing. Deputy Ó Broin spoke about capping the rental market and how we fix that problem. I know and Senator Fitzpatrick mentioned that there are provisions in the programme for Government to look to build affordable models through the Land Development Agency.
If housing does come, do the witnesses have faith in the ability of the programme for Government to deliver? Regarding the figure of 15,000 more HAP tenancies next year, when do the witnesses see that going backwards? If it goes backwards, we will begin to see less pressure and demand on those private rental spaces. I see this as a short-term measure. It was meant to have been short term but it has got longer. It cannot go on because it is just fuelling that private market.
Do the witnesses have faith in the programme for Government commitment to pull back on this measure?
Ms Marcella Stakem:
I might return to Senator Boyhan's point that affordability is key. The issue of standards also came out as significant when we interviewed members of the Society of St. Vincent de Paul, SVP. This is probably because they are going into people homes and seeing how and where they are living. There are practical things we could do to improve standards. We should not wait until a full review is carried out. There are practical things we could do, such as increasing the number of inspections and looking at incentives for landlords to allow them to improve energy efficiency within the private rented sector.
As regards the roll-out of affordable housing, we certainly hope that what is in the programme for Government materialises. We have real concerns that the numbers are not sufficient. We need to see a much more ambitious plan given the scale of the housing and homelessness crisis. We support many people who are in hidden homelessness and so do not appear in the homelessness numbers and may not be on social housing waiting lists. There is a significant number of people within that category and they are forgotten about. That is why we are really concerned about hidden homelessness and feel the programme for Government may not be ambitious enough.
Mr. John-Mark McCafferty:
I thank Deputy Duffy for his interest in our area of work. There has been a historical lack of building and not just during the recession. I remember being around the social partnership table with the National Economic and Social Council when we are talking about this back in 2014. There has been a consistent and deliberate policy not to build social housing for a long time. I do, however, have faith that, through the larger approved housing bodies and local authorities, a concerted effort is now being made up to ramp up the supply of social housing. There has been for the past number of years. I also have faith and hope - because it is the season of faith and hope - with regard to affordable housing and affordable rental. We are in the early days of that but there is great potential in that area. Having said that, the housing assistance payment will be here for at least the medium term, if not the longer term. I know rent supplement was supposed to be a short-term measure but we still have it and it is still appropriate in certain circumstances, especially given the Covid situation.
I thank the witnesses for coming in, for their briefing documents and for the work both organisations do in the housing sector. Threshold has been excellent in advocating for renters. One of the things that comes out in both presentations is the wider issue of insecurity in the private rented sector. This is not an issue of the housing assistance payment, HAP, but of the protections in place for renters. People who qualify for social housing are more vulnerable members of society because they are not able to meet their housing need as a result of affordability issues. Being in the private rented sector adds another layer of stress, unaffordability and unpredictability.
I have a number of questions, some of which may have already been asked. Perhaps the witnesses can come back to me on them. What are the organisations' experiences of differential rates throughout the country? Each local authority sets its own differential rents. We have been expecting a national differential rents scheme. How does that affect the operation of HAP throughout the country? Are there any particular hotspots in which there are problems or issues with differential rents and HAP limits?
I am also interested in top-up payments and the impacts they have had on people who have been financially impacted by the Covid pandemic. In the presentations, we saw that people are topping up by up to €760 in Dublin and €350 in Limerick and Cork. I am dealing with somebody who is paying a top-up of approximately €700 a month. He has now run into rental arrears with his landlord. He owes approximately €5,000 and his landlord is threatening him with eviction. He does not want to register with the Residential Tenancies Board as having financial difficulties. He feels his top-up is very large and he is at risk of homelessness. Have situations like this been coming up in the organisations' work? How are they advising such people? Have they been raising this issue? The issue of people falling into arrears because of top-up payments is not being discussed.
As I have said, there are wider issues in the private rental sector. I am glad to see the issue of standards addressed in the presentations. I got a reply to a parliamentary question on the number of inspections by local authorities and it is extremely low and not only this year. With regard to inspectors and follow-ups, how many inspections and follow-ups do the organisations see local authorities doing? Are the people who are falling through the cracks because of the unaffordability of housing in the private rented sector coming to Threshold? These are the people living ten people to a room. What is happening with them at the moment?
Mr. John-Mark McCafferty:
I thank the Senator. Our experience of the sector has always been one of insecurity. Things have improved incrementally and more markedly in the past four years. Once I finish talking I might pass over to Ms O'Reilly with regard to differential rents as they relate to HAP. I know it is beyond the focus of HAP but the very different approaches different local authorities take to the differential rents scheme appear to be quite problematic. This presents a barrier for people who want to move between local authority areas.
On top-up payments and the financial impact of Covid-19, as I was saying earlier, this issue requires further examination. There has been some softening and unofficial arrangements made between landlords and tenants during this time. When people were earning during the economic vibrancy that was present up to approximately ten months ago, they were highly geared in terms of their rent payments so that, if anything went wrong, they were left in a really difficult position. Some people are coming to us but others are still under the radar. I will hand over to Ms O'Reilly now, if I may.
Ms Ann-Marie O'Reilly:
In respect of differential rents, I would not necessarily say there are any hotspots or major issues appearing. There are some local authority areas in which the differential income is approximately 10% of a person's income while in a neighbouring local authority it could be 16%, 17% or 18%. Whether a person is on a small income or a big income, that is a sizeable difference. Having the same policy across the State would make a lot more sense.
In respect of local authority inspections and follow-ups, Threshold has a proposal for a national car test-style system for housing. The purpose of this is not only to get as many inspections done as possible but to allow local authorities to engage with landlords to bring properties up to standard where they do not meet minimum standards. We could inspect 100% of properties and find that a given percentage does not meet the standards, but we need to allow for the next step as well. We have a proposal which aims to ensure that properties do meet standards.
There certainly is a cohort of people who are falling through the cracks as a result of housing unaffordability, which another member of the committee mentioned earlier.
I refer to those who are outside of eligibility for HAP or social housing but whose income is not sufficient to pay the high rents. That is where we hope that the wider provision of public housing in the form of affordable rental and purchase will come in and fill that space. As more social housing comes on board, people who are currently on HAP in the private rental sector may move into the social housing and then free up more properties which may help soften rents somewhat. Due to low output in recent years, we are still a bit of a way from that.
I thank everyone who has done so for coming in and for the work that they do in general. I share the concerns about HAP and how it effects people on lower incomes. Laoise Neylon wrote an excellent article in the Dublin Inquirer on 11 November where she went through some of the personal stories of people in this situation who were in fear of becoming homeless, who had other HAP tenancies that might have ended but, by putting their own social welfare payments in, they were able to avoid being homeless. However, as the rent increases came in each year, the tiny amount of income they had left evaporated and they were left in a situation where they could not pay for the bare necessities having already made tough sacrifices. I recommend to anyone who has not done so already to read the article because it gives a good human side to what we are hearing today about numbers.
I have one question on the complete review of HAP, which is what we seek and I support. Deputy Ó Broin spoke of where increases in HAP ultimately lead to further increases in rent. How can HAP be redesigned to militate against that kind of trap where tenants are left with insufficient payment and income? What can be done to redesign HAP or the sector more generally?
Ms Marcella Stakem:
On standards in the private rented sector, we recommend a strategy to introduce minimum energy efficiency standards in the private rented sector and to have incentives in place to entice landlords to upgrade their property.
We are starting to see more rent arrears in the Society of St. Vincent de Paul. Two things need to happen. If a person falls into arrears with their local authority or landlord as regards a top-up, the main mechanism must be about homeless prevention. The rent should continue to be paid to the landlord. The HAP payment should continue and a repayment plan set up between the tenant and the local authority so that the tenancy can continue. That is really important and something we really need to see happen. We have seen an increase, not only in HAP arrears but also in rent supplement arrears in the past couple of years in particular. I think we will see that when we do our analysis after Covid, and it will also rise in January because of Covid. There need to be more protections around rent arrears and support for tenants. We have recommended the interim tenancies support sustainment protocol, similar to what is already in place for rent supplement, to be put in place for HAP.
We need to understand and investigate why landlords are not accepting HAP, considering that over 20% now rent in the private rented sector and that will continue to grow. We must have a private rental sector that is fit for purpose and landlords who want to accept HAP and work with local authorities.
On the 20% uplift, there needs to be consistency among all local authorities about accepting and using the HAP and giving the 20% uplift. Our research found that some tenants were able to receive it in previous tenancies and then were not accepted for the 20% uplift when they moved to a new tenancy, which caused great difficulties for them. We could see no reason that was the case because, on paper, their circumstances had not changed and the new tenancy had the same rent. We are not sure why it is happening and it needs to be examined and investigated. As Ms O'Reilly said earlier, there are issues around HAP in practice that could be sorted with liaison with local authorities and the shared service in Limerick that is working with tenants daily to make it fit for purpose and a viable option while people are waiting for local authority and approved housing body social housing.
Ms Ann-Marie O'Reilly:
I will respond on the HAP caps which Deputies Cian O'Callaghan and Ó Broin asked about. There are two elements to them. Practically the whole country is a rent pressure zone. Landlords can only put up the rent by 4% except in very specific circumstances. If the rent pressure zone legislation is working correctly, then increasing the HAP caps should not inflate prices in the market. Maybe we need greater liaison between local authorities and the RTB where a rent review comes in to the local authority for a HAP property or a HAP property that had previously been on the books comes in under another tenancy and it is seen that the rent has increased beyond the 4%. The local authority lets the landlord know that is not permissible, and if the landlord does not reduce it, the local authority may report it to the RTB. The RTB now has powers to inspect and sanction landlords for such breaches. We have that mechanism that would counteract any chance of increasing the caps and inflating the rents in the private market.
Alternatively, we could scrap the caps and let the market level itself out. A cost-benefit analysis would be worthwhile on what impact removing the caps would have. Threshold does not have the resources to undertake such an analysis but that is an alternative. That would mean there would not be a floor at which landlords could pitch their rents. There are mechanisms there, including the rent pressure zone legislation and all the structures around that, that should counteract the chance of HAP cap increases increasing rents locally.
I thank the witnesses for the exceptional work done by both of their organisations. I have two quick questions on which I would value their views. I am dealing with situations where there are tenants in possession who have come into financial difficulty as a consequence of Covid. They apply successfully for HAP, but when they inform their landlord, suddenly the landlord produces a relative who needs the accommodation. I see all the committee members are reacting to that, so it is clearly a common problem. Has either organisation instigated or been party to equal status cases? I am interested to know how that has been used or deployed.
That brings me to the second point. I value the witnesses' views on the mechanism where a family member may be used as a reason for an eviction notice.
It has always struck me as establishing a hierarchy of tenants because if someone is a relative of a landlord he or she is more important as a tenant than someone who is not. There is an inherent injustice in that. That is not an issue where there is an abundance of accommodation but where there is not and where there is a challenge with accommodation, it is an issue. Within that there is a belief in the conferring of a benefit that may be justified and may not be. That is probably contrary to a whole heap of policies but I would value the witnesses' views on that. Has any review of that policy ever occurred?
Mr. John-Mark McCafferty:
The Senator's points go to the crux of the balance between the landlord's property and the tenant's home. If a relative is suddenly produced and if the landlord is compliant with the legislation, there is very little that can be done. That is if there is indeed a relative, as defined in the legislation, who needs to be housed. There is a delicate balance to be struck because in certain circumstances there might be a family member in need of a home. We need to be very clear and acknowledge that, currently, the private rented sector does not have secure tenure relative to, say, social housing. It is also less secure than owner occupation. If people do not pay their mortgage there are steps and processes in place to deal with that. Massive forbearance was, understandably, shown over the years of recession and there are very different timescales and so on in comparison to the non-payment of rent. That goes to the crux of HAP because HAP is predicated on being a de factoform of social housing, although that is debatable when there are such factors at play which mean a people's tenure can end relatively quickly, through no fault of their own, by virtue of a relative needing to move in. That might be a completely legitimate action but the implications for a family are huge because they could be facing having to live in emergency accommodation.
Ms Ann-Marie O'Reilly:
Of the notices of termination with which we assisted tenants last year, just over one third were issued on the grounds that the landlord intended to sell. The next most common reason was that the landlord or a family member required the property. That accounted for 17% of the notices tenants brought to our attention last year. There is an element of having to take the landlord's word for it that there is a family member moving in and that there is a genuine need. Some 70% of landlords own between one and three properties and they may have very well intended for a family member to move in down the line or in years to come. A Bill was brought forward last year to limit which family members a landlord could use as grounds for eviction. It is difficult and it is a tricky issue to tackle because of the nature of the rented sector we have in Ireland, where so many landlords are just once-off landlords. While they have bought some property they may not really see themselves as housing providers. In a way, HAP has turned people into housing providers who never intended to be. Unfortunately, it is not a question to which there is any easy answer.
I thank the witnesses and their organisations for the brilliant work they do to support families and to help people. I know from my constituency the work that is being done. For me, housing is the single biggest issue we face. I was a councillor for 11 years and now, as a Deputy, HAP just keeps coming up. HAP meets some people's needs but from what I am hearing, and have been hearing for years, HAP does not meet the needs of the majority of people for a number of reasons. A big issue at the moment is the difference between the HAP and the actual rent and so people have to top it up. That is causing serious difficulties for people and families and, as the witnesses mentioned, is pushing people into arrears and further into poverty. That goes back to putting a cap on rents to protect people from getting into rent arrears. I checked this morning and a couple with three children get €950 in HAP. Even if they got the extra 20% there is no property in Cork - not one - they could rent. They could not even rent a two-bedroom property for the money HAP gives them. That goes back to the points made earlier. There might have been some softening of the market in Dublin but for Cork, which I represent, the situation is worse. Covid-19 has highlighted how the housing crisis is getting worse. The witnesses know that because they are on the front line and are talking to people about these issues.
I come from social housing, from Knocknaheeny. My family came from Gurranabraher and my mother came from Curraheen, which were all big social housing estates in Cork. People want that kind of security of tenure. They want to be able to build a home and they cannot do that in a HAP property because of the way HAP is designed. I am just looking to get some of the witnesses' thoughts on that. I will make two points. Vulnerable people and families are most affected by HAP. As Deputy Ó Broin asked earlier, what can we do to help them and to help the witnesses' organisations deliver for these people? I propose that we write to the Minister looking for a full review of HAP because from listening to the contributions this morning that is urgently needed.
Mr. John-Mark McCafferty:
I am conscious that Senator Moynihan asked about overcrowding and I will go back to that question if I may. This also links in to what Deputy Gould said about certain vulnerable groups. There are growing communities that are quite disconnected from the mainstream and are quite hard to reach. The RTÉ documentary which aired a few weeks ago showed that in some situations it is the landlord who is exploiting tenants and sometimes it is tenants subletting and exploiting other tenants. Such people are quite hard to reach by services like ours. They may not know we exist and may be part of migrant groups. There is a challenge there for all of us, both statutory and voluntary organisations, as regards how we reach those groups, how we promote our services and get the message across that there are supports and services available.
To respond to Deputy Gould's questions, the report exposed in a very sharp way some of the top-ups people have to pay on HAP and the impact that has on their income, leading to either a possible eviction or people going without other things. I will ask Ms Stakem to speak to that.
As regards the areas where we want change I reiterate the need for a review. Both Ms O'Reilly and Ms Stakem also made points about the policies that can be changed now.
Ms Marcella Stakem:
The three groups we most support and deal with, and which are most affected by HAP insecurity, are lone parent women, young Traveller couples and migrants. Those are the three cohorts or groups we support the most as regards HAP insecurity and we sometimes support them in homelessness as well. What question did Mr. McCafferty want me to address?
Mr. John-Mark McCafferty:
What the Deputy is asking relates to the points we would like to make, the takeaways. It is just a matter of underlining the things that were said before. The review is the main thing. The immediate pieces relate to what Ms O'Reilly said on the administrative side, the payment of HAP and so on. I do not know if she wants to underline those points again.
Ms Ann-Marie O'Reilly:
What we can do now relates to the practical administration and provision of HAP. As Ms Stakem said earlier, when a tenant is facing difficulty the approach taken is to sustain the tenancy and prevent homelessness, even where that means increasing the HAP and putting a more realistic repayment plan in place where arrears accrue. Those are very practical things that can be done immediately. I think people who work in the local authorities' HAP offices would have many practical suggestions.
I thank all the guests, particularly for their day-to-way work, but then to have the bandwidth to be able to consider a policy review of an overall instrument that is really important in the work they do is really useful. I also acknowledge how difficult it is to balance those two things.
There is a commitment in the programme for Government to reduce the reliance on HAP but, equally, we have a commitment to ensure that HAP and rent supplement levels are at an adequate level to support housing needs. That is the crux of the issue. We want to continue to use this source of housing as a way of providing much-needed housing to people. We know, however, that changes need to be made. The statistic of 75% of people being happy with HAP in many ways shows how dysfunctional the current system is in that people are happy in tenancies that are subsidised by the State to a massive extent and which last only 12 months. That says a lot about where we are. Equally, however, we have spent, according to the figure I have, €422 million as of December 2019. There is €422 million being spent on 50,000 tenancies, involving more than 30,000 landlords, and instead of having a crack team of public procurement experts ensuring we have value for money, we have 50,000 of the most vulnerable people in the State negotiating that spend with individual landlords. All the social elements aside, and I do not wish to undermine any of the contributions made so far, the public procurement issues with this alone and the value for money for the State are an indictment. Some of this has been because rent supplement was the absence of a policy, but the failure to embed the rental accommodation scheme, as opposed to the housing assistance payment, in 2014 was a real failure to provide security of tenure, which I think the RAS provides. It also embeds the local authority as a procurer of the service rather than a bystander.
In the time the witnesses have available, could they talk about any experience they have had with the rental accommodation scheme and the way in which different local authorities manage security of tenure? I know that in Dublin city a RAS exit list comes on top of any other allocation, and that provides good security in general if not to the specific home. Furthermore, do the witnesses have ideas as to how the State might move towards using its dominance in the market? I think one third of all tenancies are supported. We are doing the exact opposite. We are not taking any benefit. Could that dominance in the market and our size in procuring from landlords be a better way of managing value for money rather than an arbitrary cap?
Ms Ann-Marie O'Reilly:
In Threshold we do not have many people coming to us who have RAS tenancies. I am not sure how many RAS tenancies there are but it is certainly not to the scale of HAP. I would have to look to be sure. I think that when issues with RAS arise there is good engagement with the local authority to resolve them. That is where the tenant on RAS is viewed as a different type of tenant from the HAP tenant, who is very much in the private rented market. As the Deputy said, they have to negotiate with the landlord directly, so having the local authority involved in the RAS tenancy certainly creates an extra level of security and that little bit of support, perhaps, when it is needed. We all may need at different times in our lives that little bit of extra support, and for HAP tenants that is not really there unless they know of the likes of Threshold or the Society of St. Vincent de Paul and come and ask for the assistance.
As to how the State could use its dominance in the market, I have been giving quite a bit of consideration to that. Despite the fact the State is paying the rent on one third of properties, as Deputy McAuliffe said, and I presume that includes rent supplement and RAS, the landlords seem to hold all the cards. Perhaps we could stop some of the churn through the market, with tenants receiving notices of termination, whether for sale, refurbishment or whatever else, and having to move on to the next place and another tenant quite possibly moving into that home after the first tenant perhaps a month or a few months later. This means tenants are constantly on the back foot and constantly having to look for properties, so the landlords can dictate terms and set the agenda. It also means the State, as the body that pays that rent, is also on the back foot. Improving security of tenure is one way of changing that and giving a little bit of the power back to the tenant and the State, as the body that pays the rent, by imposing strict caps on rents and effective solutions in the medium or long term. The moratorium on evictions this year certainly helped rejig the playing field to a degree. Such interventions can help but they need to be made with the larger scale provision of affordable housing options as well.
Ms Marcella Stakem:
In the Society of St. Vincent de Paul we do not generally get a lot of queries about RAS. Rent supplement and HAP are the two main schemes about which we get a lot of queries.
In response to the question of how the State could use its dominance in the market, the local authority should, as Ms O'Reilly said, take a more proactive role in keeping tenants within their tenancies. If there are any difficulties with rent arrears, the local authority should take a more proactive approach and its first port of call should be to keep those tenants in those tenancies. That not only saves the tenant much stress and worry but also saves the State a lot of money because the next port for the person concerned or for the whole household could be emergency accommodation. It therefore makes sense for the local authority to take a more proactive approach and ask itself what it needs to do to keep the tenant in the house.
I thank the witnesses for coming before the committee. We really appreciate it. I will take it from where my colleague, Deputy McAuliffe, left off. He is right in what he said, and the witnesses' answers have probably given the response to the question he has posed in that they do not get people coming to them with issues with RAS because there is security of tenure there. That should perhaps be fed into the review. As we are here to discuss HAP, however, I will stick to that for the time being.
There is sometimes simplistic commentary to the effect that we should abolish HAP and pour all the money into building houses. That is a fine aspiration, but the question is never asked, what happens to our existing tenants in HAP tenancies? We cannot just forget about the fact that 60,000 people are in receipt of HAP. Mr. McCafferty said this will be a medium-term solution. I was happy to hear him say at the outset that he saw it as a better scheme than the previous rent supplement scheme for a number of reasons. One thing the witnesses have not mentioned during the course of their presentations or in response to any questions is the place finder service and their experience of same.
We have an integrated homeless hub in Waterford where all the agencies are in the same building along with the local authority. It is working exceptionally well. The place finder service is providing tenancies.
The Minister was in Waterford last week. One of the things that was cited was what one of the witnesses had cited regarding single person tenancies. In Waterford, when those rent caps were set, it was a very different housing market from the market we have now which, thankfully, is thriving. There is a limit of €430, and with the addition of 20% it is €516. A person would not rent a one-bed tenancy in Waterford for anything less than €750 per month. While that rent may seem small to a tenant renting in Dublin, it is all relative. What they asked for was a 40% discretionary. I am torn on the issue of increasing the limits. Despite what Ms O'Reilly said, namely, that because of the rent pressure zones, we should not see an increase, I believe we will see an increase, and that is the reality. I would agree with what they asked for, which is a higher percentage on the discretionary and that it would be utilised on an individual basis. Rather than increasing it for all the tenancies, because, for example, a family with a three-bed property in Cork need might need a higher increase than a single person in Waterford, if the discretion were given to the local authorities to vary it further than 20%, is that something that should occur and should it be fed into the review?
Mr. John-Mark McCafferty:
The Senator is absolutely right. A thought I had during the previous conversation was that if we are not hearing about it, it is not an issue. It is doing its job. It is a strand of supply. I guess for whatever reasons, RAS is less of a thing than HAP.
I also want to respond to Deputy McAuliffe. The public procurement element is key. That is at the crux of the matter. Many individuals are trying to negotiate procurement on rents. In terms of tenancy protection, the service Threshold provides is our way across the stay of assisting tenants who are in arrears and disputes. We are not saying in any way that HAP should be disbanded. Rather we are saying let us review it. It has been a step change in how we put resources back in a tenant-landlord relationship to procure and access housing and have families remain in housing, even when a family's income is increasing, which removes some of the poverty traps.
We run a similar service to place finder in Cork through our access housing unit. It was very welcome to see place finder services rolled out in 2017. The challenge for them, like Housing First, is the supply of private rented accommodation and social rented accommodation. That is the crux of the issue. Thankfully, it is beginning to come on stream, but that is from a relatively low baseline. With the larger local authorities and the bigger approved housing bodies, we are seeing a level of volume, and that is to be welcomed. I very much think that some level of regional discretion should be considered.
In the context of this review, would Mr. McCafferty view the link to being on the social housing list and a HAP tenancy as an essential one that should remain? In my experience some people only go on the social housing list to receive HAP support and do not see themselves as a long-term social housing tenant. What would his opinion be on that? He need not answer that now.
Should that link remain? Some might argue the social housing list is artificially high with people who might not see themselves as social housing tenants into the future in, say, five years but who might see themselves as just needing it right at this moment to get HAP support.
Mr. John-Mark McCafferty:
It comes out in the wash in a way. The real need is shown by virtue of someone remaining on the list and then being offered accommodation. If anything, what strikes me is trying to facilitate people in the private rented sector while there is very low supply. Certainly the experience of the emergency services in Cork is that people's dream is social housing. If anything, it is more the other way in that locality.
I wish to ask the witnesses about standards and inspections, which we touched on earlier. Where a new private property enters into the local authority under HAP, the local authority will inspect that property before taking it on, but for properties that have been in the system for quite some time, the inspection rate is probably not as rigorous. Is that why we see residents’ dwellings falling into disrepair? Are there enough resources put into that aspect to ensure dwellings that have been long-term in the system under HAP or the local authority payments are being maintained properly? It probably also feeds into the earlier question on where a relative being moved in is a cause for eviction. Are there the resources in place to check that the person who has moved in is a relative? How often is that done? Are there enough resources at local authority level to manage those two aspects?
Mr. John-Mark McCafferty:
There are a couple of issues. There has been a ramping up of resources with regard to local authority inspections, but that is from a very low baseline. They have gone for a risk-based approach. They are going for the more obvious places, the more obvious postcodes in Dublin or neighbourhoods in the cities, where they believe they will identify less compliant dwellings, but it is a lower inspection regime than certainly we would like.
What is probably underpinning this as well as resources to pay for that service is the consideration of supply. Unfortunately, because supply is still very constrained in the private rented sector, probably a pragmatic approach is being taken at local authority level to the effect that they know many of these properties are quite low quality. However, they are at least houses or apartments that are in the market rather than not being in it. There is that type of pragmatic trade-off. With the longer term rentals, there is a legacy of mostly houses and some apartments that are of lower quality. That continues to be the trade-off, even when we talk about wider energy efficiency considerations. We are balancing off higher quality dwellings for everyone with the threat of landlords leaving the market. It is not a justification for a landlord leaving the market but it is certainly a consideration. The RTB has, as Ms O'Reilly mentioned, more resources and more legislative clout to inspect and impose sanctions. The Chairman asked a good question regarding to what extent there is a revisiting of those cases where family members moving in has been cited. I do not know if Ms Stakem or Ms O'Reilly have any insights on that.
Ms Ann-Marie O'Reilly:
I believe that the RTB has been doing some work checking notices for sales to see if those properties were eventually sold. As to whether it is doing the same in terms of checking where a family member moves in, I am not so sure.
I do not know if it will become an established part of its ongoing work. As it stands, it is very much up to the tenant to police what is going on. It is up to the tenant to keep an eye on the old property he or she was in to see if a family member moved in or if it was rented to somebody else. If someone sees that occurring, he or she can lodge a dispute or notify the inspection team in the RTB. Unfortunately, by the time a person packs up, gets somewhere else, moves house and settles down again, he or she is not bothering with that. I do not think there are any established mechanisms for undertaking that follow-up.
In respect of the resources to inspect private rented housing, there has been an increase in resources, in particular in the past two to three years, and a move to establish specialist inspection teams in some of the local authorities. I spoke to some of the staff responsible for that across a number of local authorities. Some local authorities are far more experienced than others. Not only do they need the resources to carry out the inspections, but they need the resources to continue to engage with the landlord and to get the landlord to bring the property up to standard. That requires a certain skill set, apart from just knowing what the minimum standards are. There are instances where the landlord does not have the finances to upgrade the property and, in such cases, perhaps they could be steered into the repair and lease scheme. More money has been put into this area in recent years, but we have a proposal whereby we believe a greater structure could be put in place to get the properties brought up to standard.
I thank the witnesses for the presentation. I have listened to the speakers. I am living in County Limerick very near the Cork border and there is no affordable housing in the area. I am a father of four and recently I became a grandfather. We went into the property market to look for a house for my son, his partner and my grandchild. I have a very good knowledge of County Limerick. There were no suitable properties to rent. There was some rental accommodation that I would not put anyone into because it was in such a poor state, yet the rent being sought for those inhabitable properties was outrageous. The first question asked was whether the prospective tenant was on HAP. The HAP payment in Cork is higher than the HAP payment in Limerick. It was suggested that the family should move to Cork, but there are no properties. Recently, social housing has been developed in Kilmallock and Hospital but the council has reached the maximum of social housing that can be provided. There are 24 people for each of the houses that are being built at the moment. The list of people trying to get into good properties is endless.
We have many good landlords and a lot of very good tenants. We have a minority of bad landlords and a minority of bad tenants. What Covid has shown us is that all the funding is going into cities where there is accessibility to sewerage capacity to build social housing. The council wanted to build 25 units of housing in Hospital, but it only had capacity for 15. A private sewerage system had to be put into each of the remaining houses it wanted to build, in the hope that the sewerage system would be updated. Askeaton is waiting for a sewerage system for 30 years. Kilmallock recently got a sewerage system, so now it can expand. Croom is expanding and a lot of housing is due to be built. People cannot build in any of areas where they want to live in towns and villages or in the countryside because there is no infrastructure. That is a major problem for people like me who are from the country, and please God I always will be. People call us culchies. I am happy to be there.
The new 2040 plan will make it harder again, as it is forcing people into certain settings. HAP is not our biggest problem. I deal with MABS on a daily basis. Our problem is that we do not have properties. We do not have the infrastructure to build properties. Derelict properties in towns and villages are on the sewerage system but it is too expensive to renovate them because the regulations are too extensive. It depends on what town they are in. The properties are left derelict and they are not being renovated but they are being taken into account in working out the capacity of the sewerage system in the context of building new houses. In one area, one might have 21 derelict properties that could be invested in. The infrastructure is there and they are on the system. We must get people back into towns and villages. We must get people into derelict properties. Funding must be allocated. We need to relax the restrictions. Iconic buildings should be retained, and the streetscape maintained but houses should be built in towns and villages where we currently have infrastructure. Otherwise, people in County Limerick will not get to live in a house near their area because there is no infrastructure. All the infrastructure seems to be put into the cities. HAP is not the issue: infrastructure is the issue. We must have proper houses that are habitable that we can get people into.
Deputy O'Donoghue made some good points about urban regeneration and infrastructural supports to improve the housing supply. Deputy Ó Broin wants to come in with one or two questions. We must finish up shortly.
I have just two points to make. The one fact that has not been mentioned is the number of rental properties being lost to the market every year. According to the RTB, since January 2017 to September this year we have lost 20,000 rental units. That is the single biggest loss of rental units in three decades, which obviously means there is additional pressure on the system. According to Dublin City Council, we have only had 900 short-term lets come into long-term letting, so we have not seen a significant move there. The Government has a target of another 15,000 HAP tenancies next year.
I have never heard anyone say that HAP or rental subsidies should be abolished. One could not do that to the 100,000 families depending on them. The concern is that Government policy views them as long-term social housing support and the total number is increasing every year. That means the bill will forever increase, rather than seeing rental subsidies as, for the most part, temporary, while people are waiting for secure accommodation. That is a concern because if the kinds of changes many of us from all sides and the witnesses are discussing are not made, next year will be much more difficult than this year for all the reasons that we know.
I do not have a question, but I support Deputy Gould's request that the committee should write to the Minister and call for a short time-bound review. Perhaps the Housing Agency would be best placed to do it. All of the issues that have been raised here could be considered. I do not think anybody is saying the system is perfect and that it could not benefit from change. I second Deputy Gould's proposal. It would be at least one practical outcome from today for us to request the Minister to ask the Housing Agency to do a report and perhaps to send a transcript of the exchange of the committee to inform the work of the Housing Agency in that regard.
I thank Mr. McCafferty, Ms Stakem and Ms O'Reilly for their attendance this morning. It has been most helpful and informative for us and I have some takeaways from what they said.
I note that Deputy Ó Broin has seconded Deputy Gould's proposal that while HAP is here for the medium term it needs a full review. Some partial work has been done on it, but there has not been the capability to do a full review. We will request the Department to review and assess the HAP. That makes perfect sense. It is the provision at the moment.
I have noted a number of issues that were raised regarding HAP.
The streamlining of that process and the administration that goes with it needs to be addressed and hopefully it can be in the review. On the security of tenure issue, the point was made about constant changing and constant turnover of tenancy, the backlog and the stress that creates for people who are constantly moving home and not knowing when their tenancy is going to end. It has one of the worst impacts on people's stress, quality of life and their children. Everybody is aware of that and it is definitely something we need to look at. The discretion variability, which I think Senator Cummins raised, is an important point. Flexibility should be given so that people are not constrained when dealing with different aspects of different tenancies and with their differing needs at various stages in their life.
One thing I heard today about which I am concerned is that rental supports are not being taken up. I believe Ms Stakem raised that point. This is something we need to address in order that we are not looking at severe arrears in six to 12 months' time or that is has a real impact on the quality of people's life in other areas because they are trying to meet rent when there is rental support available but they are not availing of it.
Unfortunately, we must finish now because of Covid restrictions, which means we have to finish on the hour at 1 p.m. The meeting stands adjourned until 9 a.m. on Thursday, 14 January 2021. Happy Christmas to all and I thank the secretariat for its assistance..