Low income renters and housing supports

Abstract

Rental affordability challenges for low-to-moderate-income groups have been well documented. Changes to housing supports in recent years, notably the rapid expansion of Housing Assistance Payment (HAP), aim to address affordability challenges for low-income households in the rental sector. Within this context, this report seeks to inform our understanding of the current system of housing supports for low-income renters in Ireland. The report examines tenure patterns and rental affordability. It reviews the range and design of housing supports available to low-income renters and examines how the localised operation of differential rent schemes, which determines supported tenants’ contributions, affects the level of and variation in support received. With the increased reliance on the provision of indirect housing supports (through rental subsidies or supplementary income supports), it also examines the availability of accommodation for low-income renters within the private rental sector. Housing supports – by virtue of being means-tested – affect the financial incentives individuals have with regards to being in paid work or working an additional hour. This report uses SWITCH, which is the ESRI’s tax and benefit microsimulation model, to analyse the impact of these supports on the effective tax rates faced by low-income renters: a key consideration for any means-tested supports.

Housing, Health and Happiness: How Inadequate Housing Shapes Child and Parental Wellbeing

“…Studies of energy deprivation among all households, rather than just those with children, show higher levels of energy deprivation among those in rental accommodation (Barrett et al, 2022), with recent inflation in energy prices disproportionately impacting on lower-income households. One-off measures, including assistance towards fuel costs, have been of greater benefit to lowerincome households (Doolan et al, 2022), but research suggests a role for better targeting of supports towards families on social welfare payments and low-income working households (Barrett et al, 2022).…”

“…This has been coupled with very low investment in social housing provision in the post-recession period, and a rise in the proportion of households in private rental accommodation, increasing from 10 per cent in 2006 to 18 per cent in 2022. 1 Meanwhile, recent years have seen several indicators which suggest Ireland is in the midst of a housing crisis (Doolan et al, 2022;Roantree et al, 2021;Slaymaker et al, 2022), with rising housing costs, lack of secure tenure, a shortage of affordable rental accommodation, and a large rise in the number of homeless families. 2 While problems in the housing system in Ireland have been under the spotlight for the last decade, relatively little attention has been paid to the consequences of housing issues for the wellbeing of families.…”

Cliff edges in the Irish tax-benefit system

“…A substantial number of households in Ireland are in receipt of housing supports. Doolan et al (2022) estimate that the share of renters has increased from 18 per cent in 2000 to 29 per cent in 2020, with significant rises in the numbers in the supported rental sector (i.e., those in either directly provided social housing or those in receipt of rental supports such as the Housing Assistance Payment (HAP)).…”

“…They remain eligible for support while others in an identical situation will not qualify. The targeting, or lack thereof, of housing supports is highlighted in Doolan et al (2022) -almost one-fifth of supported renters are in the top half of the income distribution, while many lower-income renters receive no state support for their housing costs.…”

“…The existence of a threshold above which individuals cannot apply for social housing or HAP is exacerbated by multi-year freezes in the income limit -for example, the qualifying household income limit for most housing supports was frozen between 2011and 2022. Doolan et al (2022) estimate that a knock-on effect of this freeze is that the share of households eligible to apply to their local authority for housing supports fell from 47 per cent in 2011 to 34 per cent in 2019. Indexation of these limits in line with inflation would avoid this issue.…”