Simon calls for more public money for private landlords

nostro

Approx €700,000,000 a year in now being given to private landlords by the state. A massive increase on what was given years ago. As a result the availability of accommodation for those who want to rent privately is much restricted.
At the same time a miniscule amount of social housing is being built. Imagine how many social housing units could be built annually with this €700 million.

The solution according to Simon. Give even more money to landlords. Am I missing something? Does Simon have an agenda that they are not sharing with us or is there any logic to what they are demanding?



Simon also wants increases in Housing First, rent supplement and housing assistance payments

https://www.irishtimes.com/news/ireland/irish-news/just-7-of-people-receiving-welfare-payments-can-afford-city-rents-1.3424585?mode=amp

handlemaster

landlord is not charity work. it would be reasonable that a landlord should get the same rent from a welfare tenant that they would get from a working tenant.

Nate--IRL--

nostro wrote: »

At the same time a miniscule amount of social housing is being built. Imagine how many social housing units could be built annually with this €700 million.

Valid point, but that doesn't funnel public money into banks, via landlords, to sustain the asset values on their books.

Nate

nostro

handlemaster wrote: »

. it would be reasonable that a landlord should get the same rent from a welfare tenant that they would get from a working tenant.

So keep increasing the amount of public money being given to landlords till the working poor are priced out of the private rental market. We may be at that stage already. Private landlords are not taking the €700,000,000 pa out of "charity" They are taking it because it is more than they can get from those that want to rent privately.
If the state built social housing they would be forced to take less from private renters.
And yet Simon wants to increase the amount they receive.

Fann Linn

nostro wrote: »

So keep increasing the amount of public money being given to landlords till the working poor are priced out of the private rental market. We may be at that stage already. Private landlords are not taking the €700,000,000 pa out of "charity" They are taking it because it is more than they can get from those that want to rent privately.
If the state built social housing they would be forced to take less from private renters.
And yet Simon wants to increase the amount they receive.

The working poor might just be hitting the mark when it makes sense not to work if this continues.

beauf

Its not given its paid.

The Govt have outsourced social housing to private Landlords.
They also outsourced, any loss, over staying, damage, maintenance and all other costs as well.
That's before insurance, build costs etc.

Do I think they should be building social housing. Yes. But will it be cheaper I don't know.
Would it better for the housing market. Yes.

Grumpypants

nostro wrote: »

Imagine how many social housing units could be built annually with this €700 mill

No need to imagine, math tells us it's about 2000 houses that would cost €700mill.

We have about 100,000 people on the waiting list for social housing (never mind the folk in private rented houses you want to also build for).

Lets say each is part of a 2-3 person family then you need 40,000 houses for them. That would take 20 years to build at a spend rate of €700 mill a year.

And by that time the list would have filled up again with the next generation of those in need of social housing.

beauf

nostro wrote: »

...Private landlords are not taking the €700,000,000 pa out of "charity" They are taking it because it is more than they can get from those that want to rent privately.....

There are many reasons to accept it. But paying more than private renters is not one of them.

http://www.thejournal.ie/simon-communities-report-hap-rent-3900282-Mar2018/

nostro

Grumpypants wrote: »

No need to imagine, math tells us it's about 2000 houses that would cost €700mill.

.

That's assuming a build cost alone of €350,000 per unit. We don't need massive mansions for social housing. We need small units of acceptable standard. The state already has sufficient land so there would be no extra cost there. And economics of scale if building large numbers would decrease costs further.

nostro

beauf wrote: »

There are many reasons to accept it. But paying more than private renters is not one of them.

http://www.thejournal.ie/simon-communities-report-hap-rent-3900282-Mar2018/

Oh but it is. Disinformation from Simon. Do you really think that that landlords would be signed up for all these schemes if they could get more from renting privately?

HeidiHeidi

I thought the problem was that landlords wouldn't sign up for all these schemes?

Gumbo

nostro wrote: »

Oh but it is. Disinformation from Simon. Do you really think that that landlords would be signed up for all these schemes if they could get more from renting privately?

I could have rented my house out for more privately. But I took someone I know for about 3-400 less per month through the HAP scheme as I felt the lower rent and knowledge of the person was worth more than getting more and risking with unknown tenants.

Cuddlesworth

kceire wrote: »

I could have rented my house out for more privately. But I took someone I know for about 3-400 less per month through the HAP scheme as I felt the lower rent and knowledge of the person was worth more than getting more and risking with unknown tenants.

For most landlords I know, its more like 1 to 1.5k a month to rent to HAP.

antoinolachtnai

The cost to provide a 3 bed house to more or less the mnimum spec in Dublin, including land, is €294000 excluding the builder’s profit (which pays for his risk and capital).

You have to factor in the value of the land. If you don’t you are fooling yourself as to the true cost.

There are significant costs to managing rentals above the cost of actually providing the house.

You won’t build many for the money involved.

We do need to do something to stimulate housing provision. It’s a pity it isn’t viable for landlords to use their profits to provide more housing.

nostro

Grumpypants wrote: »

We have about 100,000 people on the waiting list for social housing (never mind the folk in private rented houses you want to also build for).

HeidiHeidi wrote: »

I thought the problem was that landlords wouldn't sign up for all these schemes?

antoinolachtnai wrote: »

The cost to provide a 3 bed house to more or less the mnimum spec in Dublin, including land, is €294000 excluding the builder’s profit (which pays for his risk and capital).

You have to factor in the value of the land. If you don’t you are fooling yourself as to the true cost.

There are significant costs to managing rentals above the cost of actually providing the house.

You won’t build many for the money involved.

i would question some of these assertions. Last year approx 26,000 were in receipt of social housing. For ideological reasons the vast majority through private landlords.

Approx 1000 social housing units were built last year which is up from I think 75 the year before. That is whey the €700,000,000 was paid over to private landlords, Hotels, guesthouses etc. If even a small portion of this was instead diverted to providing social housing it would make a big difference. I don't thing you need to count land cost as the state already has the land and I think a small townhouse could be built for less than €294000 .

Simons assertion that landlords are not signing up for social housing payments which they are using to call for an increase in the amount paid to landlords is blatenty false misinformation. It is disproven by the facts and I find the assertion that some landlords are signing up for these schemes for altruistic reasons to be absurd and laughable.

Some other points. Providing a house is largely a one off cost. Thereafter rent is paid to the state even if it is small. Paying landlords or hotels in a continuous cost that is never ending.

jimmycrackcorm

nostro wrote:

i would question some of these assertions. Last year approx 26,000 were in receipt of social housing. For ideological reasons the vast majority through private landlords.

It's for financial reasons, not ideological, that private landlords are utilised. The ideological reasons for not building social housing is that unlike in the past when council estates were built, the bleeding heart brigade insists that mixed housing is needed to prevent ghettos.

nostro wrote:

Some other points. Providing a house is largely a one off cost. Thereafter rent is paid to the state even if it is small. Paying landlords or hotels in a continuous cost that is never ending.

That one off cost is equivalent of 25 or so years of an monthly HAP payment. That annual 700m translates to borrowing over 17B up front to pay for the equivalent housing.

Nomis21

Fann Linn wrote: »

nostro wrote: »

So keep increasing the amount of public money being given to landlords till the working poor are priced out of the private rental market. We may be at that stage already. Private landlords are not taking the €700,000,000 pa out of "charity" They are taking it because it is more than they can get from those that want to rent privately.
If the state built social housing they would be forced to take less from private renters.
And yet Simon wants to increase the amount they receive.

The working poor might just be hitting the mark when it makes sense not to work if this continues.

That point has already been reached. Move to Bally middle of nowhere where housing is still available and within HAP limits and get a medical card and fuel allowance. Now compare that to a minimum wage job in the city with high rents and commuting costs.

handlemaster

nostro wrote: »

handlemaster wrote: »

. it would be reasonable that  a landlord should get the same rent from a welfare tenant that they would get from a working tenant.

So keep increasing the amount of public money being given to landlords till the working poor are priced out of the private rental market. We may be at that stage already. Private landlords are not taking the €700,000,000 pa out of "charity" They are taking it because it is more than they can get from those that want to rent privately.
If the state built social housing they would be forced to take less from private renters.
And yet Simon wants to increase the amount they receive.

The issue here is not what private companies and individual do with there property investments its not up to them to do anything with social housing issues. The state many years ago decided to leave that sector and not provide the housing for the people who needed it. There is no issue with landlords the issue is with social housing not been provided by the state. In fact the private sector is helping the state but are penalised with  high taxes and no come back when the social tenants from hell coming knocking.

beauf

nostro wrote: »

Oh but it is. Disinformation from Simon. Do you really think that that landlords would be signed up for all these schemes if they could get more from renting privately?

Yes. If you understood how renting works. Which you don't.

If a tenant signs up as private tenant but then switched to a scheme the LL has almost no way of getting out of that. Also if the tenant has been good up to that point there is no reason to change them. Because some LL are after a steady income not profiteering.

Also if you are in an area, where there is low demand like a remote area, or a bad area, some LL will take anyone they can. Many are not in a position to sell up.

There has been endless commentary about how hard it is to get a LL to take people on these schemes, the shortage of rental accommodation, LL leaving and/or moving to AirBNB.

Its like you've had your head under a rock for the past 20yrs.

beauf

Nomis21 wrote: »

That point has already been reached. Move to Bally middle of nowhere where housing is still available and within HAP limits and get a medical card and fuel allowance. Now compare that to a minimum wage job in the city with high rents and commuting costs.

Been reached a long time ago.

Grumpypants

nostro wrote: »

That's assuming a build cost alone of €350,000 per unit. We don't need massive mansions for social housing. We need small units of acceptable standard. The state already has sufficient land so there would be no extra cost there. And economics of scale if building large numbers would decrease costs further.

That's the average cost of a 3 bed semi in Dublin now. Once you factor in the need for 4/5/6 bed houses for families with 4-6 kids that's a pretty conservative estimate.

Building costs would not come down at scale as you aren't building all in the one location. People want their council house in the area the grew up in so you need to build all over the city and country. So you are not using one building/merchant provider/architects/services installers etc.

Grumpypants

nostro wrote: »

i would question some of these assertions. Last year approx 26,000 were in receipt of social housing. For ideological reasons the vast majority through private landlords.

Approx 1000 social housing units were built last year which is up from I think 75 the year before. That is whey the €700,000,000 was paid over to private landlords, Hotels, guesthouses etc. If even a small portion of this was instead diverted to providing social housing it would make a big difference. I don't thing you need to count land cost as the state already has the land and I think a small townhouse could be built for less than €294000 .

Simons assertion that landlords are not signing up for social housing payments which they are using to call for an increase in the amount paid to landlords is blatenty false misinformation. It is disproven by the facts and I find the assertion that some landlords are signing up for these schemes for altruistic reasons to be absurd and laughable.

Some other points. Providing a house is largely a one off cost. Thereafter rent is paid to the state even if it is small. Paying landlords or hotels in a continuous cost that is never ending.

26,000? That is just in Dublin. There are around 100K in the whole country with another 100k on a waiting list.

It isn't false info. I rent my house to the council. The average rent paid by a private tenant in my estate is €1100-1200.
The council will pay me a max of €920. And that was only increased this year from the €600 they paid me for the last 3 years. When you factor in the 60% tax rate and the increased maintenance costs for having a young family at home all day, I've taken a huge loss by having a council tenant.

What the Simon community are saying is correct. The rent supplement, HAP scheme, RAS etc. etc. fall short of the amount landlords can get on the open market. It puts people at a huge disadvantage when trying to rent ever before you factor in the stigma effect.

Paying the Rent to landlords is very cost effective. Landlords pay 60% tax on that so out of the 700mill paid out 420mill is taken back through revenue. And the remaining money is generally pumped into the local economy as landlords fix up and repair their properties. So they are renting those houses for a fraction of the cost of the building and completely removing themselves from the need to maintain those houses.

mitresize5

it continues to baffle me how the landlord has ended up being the bad guy in all this.

Providing housing for those unable to provide one for themselves delegated by the government
Rent payed at below the market rate in the case of the RAS scheme
Any 'profits' taxed at 52%
Bogged down in paperwork,
yearly inspections
No rights when it comes to dealing with bad tenants.

... but all landlords are Gordon Keko type figures supping off the tit of the mother state.

Some people are delusional

antoinolachtnai

The real problem is that the payment isn't large enough to make it attractive to get landlords to actually build new homes. That is what is needed.

I can't see how the local authority (or anybody else) can deliver new housing in Dublin for less than €1500 a month. (You can do it if you don't count in the cost of the site and the various levies and contributions but I don't see what good it does to leave these out.)

The_Conductor

The actual figure being spent on government intervention in the rental sector was 535m in 2017- and is expected to top 3 billion over the next 5 years. Its not all being spent on private accommodation though- approximately 30% of it is being spent on new social housing units by the local authorities and approved housing associations.

That said- the fact that 450m a year is spent by the government on private sector accommodation- rather than using either a carrot or a stick on the local authorities- to persuade them to construct suitable social housing units in locations where it is most needed- is deplorable.

We seem to be going round and round in circles. Local authorities are still actively selling housing units to tenants- at vast discounts to open market rates- when I think any sane person would argue social housing units should be allocated for a set period of time- and held by the state in perpetuity.

The argument that it doesn't pay to build social housing units in Dublin- shouldn't feature. If workers can't afford to live in Dublin- why should social housing recipients expect to?

We are going about all of this arseways. When Simon and Threshold are arguing that the government needs to copperfasten their funding of the sector- they are looking at the manner in which tenants on the various schemes typically have a guaranteed tenure of 2 years- and they want this extended. They are not looking into whether or not the scheme makes any sense at all- simply at how they can try to elongate the tenure of social welfare recipients- i.e. they have a different pound of flesh in the argument than the landlords have- but are fighting the same ironic battle.

3 billion over 5 years- is a lot of money- however- if you break it down- this is 3 billion, supporting 75-80,000 tenancies, at a total cost of 37,500 gross- or less than 8k per tenant per annum............ The figures look large- but when you break them down- they're not actually.

The other part of Simon's argument- is the levels at which HAP/RAS and the other schemes are pegged- is uncompetitive with the private sector- and hell, if its an average of 8k per annum- yes, it is. However- to bring it up to equality- or a bit above the private sector- would imply an annual cost of up to 1.2 billion- which of course our poor taxpayers would be asked to fork over...........

The whole setup is nuts- its completely and utterly bonkers. It is clearly unsustainable- yet the only refrain and chorus from everyone- is chuck more money at it.

Lumen

The_Conductor wrote: »

If workers can't afford to live in Dublin- why should social housing recipients expect to?.

This "afford to" language is weird.

If you have every person in the country one billion euros to spend on housing they still wouldn't all be able to live in Dublin, because there is more demand than supply.

Due to this scarcity we allocate at the margin based on various parameters, like "need" and access to debt, but we don't allocate the whole housing stock that way. This is mostly the same for both social housing and owner occupiers: once you're in you're in, regardless of your circumstances (including if you stop paying your mortgage, for the most part).

What I think Simon are asking for is a costly rebalancing, such that people on housing supports have access to the same proportion of the housing stock as they had previously.

This is not a uniquely Irish approach, it's similar to the percentile approach used in the LHA system in the UK.

"Under LHA, Broad Market Rental Areas (BMRA) have been defined, and rent officers attempt to determine a median rent level which is intended to give Housing Benefit recipients access to roughly the cheapest 30% of the properties available to rent in any given region"

Source: https://en.wikipedia.org/wiki/Local_Housing_Allowance

Of course with any system there are winners and losers, and due to asymmetrical loss aversion people feel losses more than gains.

This is why in general governments mostly do nothing, because doing something creates more whinging than cheering.

The Student

The Govt/Local Authorities don't want to house people themselves. They are happy to leave it to the private sector.

To deal with the problem we need to build social housing full stop. But we need to change our mindset to housing. if somebody is in need of housing then house them, if its not in their preferred area than tough.

If social housing tenants (or private tenants) don't pay rent then evict them. We have this bizarre belief that everybody should be housed no matter what and where they want to be.

We can't provide housing where tenants want it so we do nothing to remedy the situation.

My personal opinion is if you need accommodation then offer it where its available. if you refuse it then you should be put back to the bottom of the list.

If there are areas that are undesireable because of a few family's then deal with these family's. Evict them if needs be.

nostro

The_Conductor wrote: »

The actual figure being spent on government intervention in the rental sector was 535m in 2017- .

535m was the amount given to participating landlords under the three main schemes. It does not include money given to hotels, guesthouses and others under other schemes.

nostro

The_Conductor wrote: »

That said- the fact that 450m a year is spent by the government on private sector accommodation- rather than using either a carrot or a stick on the local authorities- to persuade them to construct suitable social housing units in locations where it is most needed- is deplorable.

The argument that it doesn't pay to build social housing units in Dublin- shouldn't feature. If workers can't afford to live in Dublin- why should social housing recipients expect to?

We are going about all of this arseways. When Simon and Threshold are arguing that the government needs to copperfasten their funding of the sector-. they have a different pound of flesh in the argument than the landlords have- but are fighting the same ironic battle.

The whole setup is nuts- its completely and utterly bonkers. It is clearly unsustainable- yet the only refrain and chorus from everyone- is chuck more money at it.

It is indeed. And while I fully understand the landlords on this thread defending the system which is a cash cow for them what is utterly bizarre is that organisations that are supposed to be representing the under privileged like Simon and Threshold are instead fighting to increase financial transfers from the state to landlords.

The Student wrote: »

To deal with the problem we need to build social housing full stop. But we need to change our mindset to housing. if somebody is in need of housing then house them, if its not in their preferred area than tough.

If social housing tenants (or private tenants) don't pay rent then evict them. We have this bizarre belief that everybody should be housed no matter what and where they want to be.

My personal opinion is if you need accommodation then offer it where its available.
.

Those in need of free social housing should not be allowed to be too choosy as to where they live. But a consequence of the current policy of financial transfers to landlords is that they often are whereas those who are paying themselves without state support have to rent in less desirable areas. The whole system is corrupt and the massive housing support payments are responsible for the housing crisis. It is severely restricting rental supply and increasing rents to an unattainable level.

Simon wants to give hundreds of millions more to private landlords. That is not the answer
The answer to the housing crisis is very simple. BUILD SOCIAL HOUSING

Eric Cartman

The_Conductor wrote: »

If workers can't afford to live in Dublin- why should social housing recipients expect to?

bingo. Social housing should be on a constant fit for requirement basis. If you need to be in Dublin because you work there - grand , if you don't then off to rural Ireland it is with you.

beauf

nostro wrote: »

... I fully understand the landlords on this thread defending the system which is a cash cow for them ...

Allow Landlords to refuse social welfare payments then .....End of cash cow overnight.

https://www.irishtimes.com/news/crime-and-law/landlord-ordered-to-pay-more-than-42-000-to-three-tenants-1.3192606