As Christmas approaches, the number of families facing homelessness is growing, as is the incidence of individuals sleeping rough in the streets. The Government provided generous funding for social housing in its recent budget. But because of past policy failures and a shortage of affordable rental accommodation, the situation remains critical and, if anything, has got worse. Without further action by way of rent controls or increases in welfare rent allowances, the blight of homelessness and all its attendant miseries will intensify.
The causes are complex and intertwined. The effective transfer of social housing to the private sector more than ten years ago created a shortfall in local authority accommodation and required the introduction of a rent allowance scheme. The rising cost of that scheme and the economic crash brought rent allowance cutbacks. The recovery in the housing market, particularly in Dublin, has done the rest. Local authorities set rent allowances at 8-12 per cent below market rates because of the guaranteed rental returns for landlords. A recovering market saw landlords look elsewhere for tenants, while changes to regulations confined households to the cheapest 35 per cent of the market. Competition within this sector, involving students, lower paid workers and qualifying families, became intense. In Dublin, rents increased by as much as 40 per cent and families are being squeezed out as their tenancies expire.
The Government appears resolved not to increase allowances or to impose a cap on rent increases. It will take time, however, for the €2.2 billion it provided for additional social housing to have a measurable effect on rents. In the meantime, investment companies that bought thousands of new and unfinished apartments after the crash are expected to increase their returns from the upper end of the market. A supply of additional accommodation might be expected to stabilise rents or cause them to fall, but this is not a normal market. Bankers and builders are united in predicting an explosion in all rental incomes.
Minister for the Environment Alan Kelly provided Dublin City Council with an additional €4million to provide for homeless people this winter. He also promised to publish a social housing strategy "very shortly". It cannot come soon enough. Water charges have dominated recent headlines but homelessness represents a more fundamental issue. Social groups, including Focus Ireland, say that up to 800 adults and children became homeless this year in a deteriorating situation. Last month, in Dublin alone, 54 families were displaced. Numbers sleeping rough have also risen. If the Government does not raise welfare allowances, it should consider imposing a temporary inflation-based cap on rents. Basic, affordable accommodation should be treated as a political priority.