The Government should acquire buy-to-let properties in mortgage arrears and use them for social housing, according to the National Economic and Social Council.
In a significant report on the rental sector to be published this Wednesday morning, the council also calls for the introduction of rent regulation, more favourable tax treatment for landlords who accept rent allowance, leases to run indefinitely and, for the “vigorous” delivery by Government of its social housing strategy.
The report, Ireland's Rental Sector: Pathways to Secure Occupancy and Affordable Supply, was discussed by Cabinet on Tuesday and will inform any decision Government makes on measures to reform the sector, including the introduction of rent regulation.
Minister for the Environment Alan Kelly has said he favours some sort of rent certainty and proposals are being examined by the Attorney General, according to senior sources.
The NESC report says the debate on the sector needs to “break free of the current dualist” approach, which sees some arguing for rent controls and others for better incentives for landlords to remain in the market and for developers to increase supply.
“We need policies that both provide tenants with more secure occupancy and create supply-side supports to increase the availability of affordable rental housing.” The rental sector is “under enormous pressure” with the impact being felt by individuals and also families with children, it says.
The latest data from the property website Daft.ie, published this week, found rents in Dublin’s commuter counties had increased by 14 per cent since last year. It also found there were now fewer properties available to rent – some 4,300 – across the State than at any point since 2006.
The dearth of rental properties available and the upward pressure on rents are now becoming a threat to Ireland’s competitiveness and job creation, the NESC adds. “The sector needs a new vision and strategy if it is to become an attractive long-term housing choice.”
The first thing the Government must achieve is a “secure occupancy model” for tenants, which must include “greater rent certainty for tenants through a disciplined, market-sensitive form of rent regulation and adjustment”. There should also be “a move from four-year leases to leases which are effectively indefinite”.
The second strand of the strategy must be to “increase the supply of permanent, affordable rental housing available to low-income and intermediate [middle/low income] households”. Among the instruments that could be used are low-cost loans, access to State-owned land on favourable terms, tax incentives and loan guarantees.
“If State land is used for affordable housing, land ownership should be retained with a State body or voluntary organisation with a long-term commitment to providing affordable housing.”
To support landlords, rental income should have full tax relief on interest payments, and it recommends “more favourable tax treatment” for those who accept tenants on rent allowance or the new housing assistance payment.
The approach also “depends on vigorous delivery of the social housing strategy . . . In order to move towards a larger, more stable private rental sector, it is necessary, over the coming decade, to drive back up the share of social housing provisions by local authorities and approved housing bodies.”
